The
Portland Arts Education and Access Fund helped add or keep 75 art and music
teaching positions across six Portland school districts in its first y­­­ear,
but the citywide income tax had a "minimal impact" on local arts
groups, according to the first report from a volunteer oversight committee.

Portland
voters approved the $35 tax in November 2012. After year one, Stanley Penkin, chairman
of the volunteer citizen group overseeing the arts program, recommended that City
Council members take a hard look at all of the policies governing the
controversial income tax.

Among
their recommendations, Penkin's committee said city leaders should:

Take
a more proactive and "positive" role in promoting the benefits of the arts tax.

Create
more "specific language" about how public schools can use the money
to avoid confusion while also setting
"clearer guidelines and parameters."

More
clearly articulate who is required to pay the tax. Any Portland
resident who is at least 18 and can claim more than $1,000 in annual income
must pay the $35 tax, but there are exceptions.

Streamline
the collection process within the city's Revenue Bureau to make it easier to
pay and keep scofflaws accountable.

The
oversight group, which presented its findings to the City Council Wednesday,
had one potentially more controversial proposal: City leaders should reconsider
the cap that keeps arts tax administrative costs to five percent or less,
because it has unintentionally limited outreach efforts in minority populations
and in languages other than English.

"You
start seeing flaws and places where things maybe don't work that well and maybe
aren't that realistic," Penkin said of the administrative cap.

Commissioner
Dan Saltzman said that proposal "doesn't make any sense."

"Would you view that as a breach of faith to the public?"
he asked.

"That
may well be," Penkin said, but the tax rollout was "very
confusing."

Administrative
fees for the first year approached $1 million, although $589,085 of that was
for one-time startup costs.

According
to the most recent figures, schools received $6.7 million from the arts tax in
the first year. The Regional Arts & Culture Council took in $200,000,
according to the report, and another $125,000 is on the way.

RACC,
which distributes grant funding to dozens of local arts organizations, received
its share of the revenue generated from the 2012 tax year this January. The
report said the amount allocated to RACC will "likely have a minimal
impact" in art groups' abilities to increase programming and access. The
total also fell short of projected goals of providing operational support to
RACC grantees.

RACC
expected to receive between $3 million and $4 million in the tax's first year.

According
to the report, the Reynolds School District wasn't complying with some of the
art tax stipulations, of having one arts teacher for every 500 kindergarten to fifth
grade students. The district also used some of the $357,942 it received to pay
for field trips and art supplies, which wasn't clearly outlined as a
permissible use.

The oversight committee asked the City
Attorney's office to look into the specific rules governing the
intergovernmental agreement between Portland and the districts. The group
wanted to know if arts tax funds had to be spent on hiring new teachers, and
whether schools could use the funds for "ancillary items."

The attorney's office said the ballot language and
other descriptors of the tax seemed to indicate retaining teachers was one
expected role of the tax." Generally, the text of the IGA doesn't get into
the level of detail as to how the arts education is to be provided, nor is that
the level of detail intended in the IGAs but the recital, while not definitive,
suggests field-trips were allowed," the attorney's office found.

Thomas
Lannom, the Revenue Bureau director, said initial projections of what the tax
would raise in the first year may have been too optimistic. He said his department
expected around $7 million.

Lannom
said 288,000 Portlanders paid the tax in either of the first two years. He
called that "an incredibly encouraging number." Some 403,000
Portlanders are required to pay the tax.

A
large number of people, some 130,000, are "doing the right thing" and
paid both years, he said.

Portland
has collected $5.2 million thus far from the 2013 tax, which was due April 15.